Union wants Canadian government to set auto quota

Tue Jun 10, 2008 5:15pm EDT
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By John McCrank

TORONTO (Reuters) - The Canadian Auto Workers union called on the federal government on Tuesday to require all automakers to produce at least as many vehicles in Canada as they sell in Canada.

The move comes as the union's blockade of General Motors of Canada's headquarters in Oshawa, Ontario, moves into its seventh day in a protest against the planned closing of GM's Oshawa truck plant.

"General Motors sold about 235,000 trucks in Canada last year, and that's enough to keep our truck plant open," CAW President Buzz Hargrove told delegates at a union convention in Toronto.

However, that idea has been tried before, from 1965 to 2001, with the Canada-U.S. Auto Pact, but was abolished after the World Trade Organization ruled it favored some countries over others, said Anthony Faria, an analyst at the Auto Research Centre at the University of Windsor.

"That is really not doable at all," Faria said. "In essence, if the U.S. wanted to do the same thing, it would decimate the Canadian auto industry, which ships about a million units a year to the U.S."

GM, struggling with a sharp drop in demand for pick-up trucks and SUVs amid soaring gas prices and an economic downturn in the United States, said it would close the Oshawa truck plant in September 2009, along with three other truck plants in North America.

"Americans used to buy a lot of that stuff (trucks and SUVs) with home equity loans, because it's tax deductible. And now, for a lot of them, the home equity is gone and credit has also tightened up, and gas has gone to $4 a gallon," Stew Low, a spokesman for GM Canada, told Reuters.

"So all of a sudden you've got these three things playing against each other and people are saying I'm going to go buy something smaller and more fuel efficient," Low said.   Continued...